A fair statement today, particularly when a worker in China earns 60 cents an hour (according to Senator Hollings). The Mexicans are now complaining about corporations leaving Mexico for lower cost operations. Its called the 'race to the bottom'. The Senator put the Mexican wage at $2.50 per hour. I guess American pay is relatively high by today's international standards. I wonder how many of those foreign laborers invested in the American infrastructure over the last 200 years?
Perhaps it would not be unreasonable to establish an economic policy that would result in a more gradual exposure, not to competition from foreign markets with similar standards of living, but to competition from the low cost labor that can now be exploited in third world developing nations. Americans had built up their own standard of living over time and naturally grew accustomed to it. So what is our obligation to see to it that we and they can remain economically vital?
A gradual exposure to low cost foreign labor would still result in favorable short term profits while enabling families sufficient time to adjust to new realities. In this way, we Americans can remain vital as we continue to invest abroad and purchase lower cost goods. One problem that I see though is that foreign governments now can read American economic strategies on the net. Everyone seems to be taking the same road we are: they build universities and educate the young in the most promising technologies that will generate future returns. They also invest in third world developing nations. At 60 cents an hour, even a small business can afford to pay a student in a third world developing nation while they are attending high school, pay them to go to college, and then hire them to perform work. Who knows, maybe they will become competitive enough to build our nuclear submarines and launch their space vehicles...
I talked at length to the head of AK Steel, who told me that he regretted in the 1970s not firing the number of people he needed to fire because of his company's "family" type policy. In the long run, he said, it caused far more heartache, and they had to be fired anyway, and in the meantime, other wages were held down trying to keep them on. I think the same would happen here.